Consumer FAQs: Banking, Saving and Borrowing Money

Bank Branches

My local bank branch is closing. Can’t you do something about it?

State-chartered institutions must give notice to the Department of their intent to close a branch office at least 90 days in advance of the planned closing. In its notice, the bank must provide specific information, including, but not limited to, a statement of the reasons leading to the decision to close the branch, and a detailed map of the area served by the branch, showing the distance and direction of all remaining banks and state-licensed financial service providers. In addition, the bank must provide notice to its branch customers and post notice of its intent to close the branch on the same day that it submitted notice thereof to the Department.

Notice of the planned closing is published in the Department’s Weekly Banking Bulletin, commencing a public comment period. All comments are carefully reviewed and responded to by a Community Reinvestment Analyst, and public comments are shared with the bank for its response. Based on information provided by the bank and gathered from other sources, the Department is then required to make a finding of whether the closing would result in a "significant reduction of banking services" in the community to be affected. While the Department engages in substantial outreach to government officials, community groups and banking institutions in this context, it must be noted that we have no authority whatsoever to prohibit the closing of a bank branch.The Department’s outreach, however, may facilitate contact between the institution and the community, and ultimately mitigate a potentially adverse impact on the community.

While the Department performs thorough analyses of all branch-closing notifications, staff focuses on those that may impact low or moderate-income communities. If the closing branch or its service area includes low or moderate income areas, or if it appears that the closing may reduce services for residents in the community, Department staff routinely contact local planning departments, community groups or leaders in order to: (1) learn more about the nature of the community to be affected; (2) gather other qualified opinions about the impact of the branch closing on the community; and (3) facilitate dialogue between the bank and the community about local concerns, including, but not limited to, future access to branch services, and seeking an appropriate purchaser or successor tenant for the site. In some instances, Department staff makes site visits to the closing branch’s service area. Under the appropriate circumstances, the Department may bring issues to the attention of bank management, and ask the bank to reconsider the closing, or consider taking steps to mitigate the impact of the closing.

Is there anything I can do about a planned branch closing?

The Department encourages the public to comment on a proposed closing. Anyone may submit a letter of protest regarding the closing to the Department of Financial Services.We often receive such comments after a patron has seen the closing notice in their branch, or has received notification by mail. Many community leaders also have a subscription to the Weekly Banking Bulletin, which publishes all notices. Please forward your comments regarding branch closings via emailor mail comments to New York State Department of Financial Services, Community Development Unit, One State Street New York, NY 10004-1417

Bank Accounts

I deposited a check in my bank but the bank has not credited my account. How long does it take for a check to clear?

The availability of funds is governed by Regulation CC of the Federal Reserve Board and Part 34 of N.Y.S. General Regulations of the Banking Board. Funds availability generally depends upon three characteristics: a) Where the check is drawn (e.g., local or out-of-town institution), b) Dollar amount of the deposit, and c) The issuer of the check (e.g., governmental units or private sector). Financial institutions are required to post a notice of its funds availability policy pertaining to consumer accounts in each location where its employees accept consumer deposits.

I deposited a check in my account. The bank teller gave me back a stamped copy of a deposit slip, then the bank lost my check and said they could not credit my account until I contacted the writer of the check. Why?

A check is deposited subject to collection, and any credit that you may receive until the check clears is temporary. Under the New York Uniform Commercial Code, the funds are not actually credited to your account until your bank is paid by the checkwriter's bank. If your bank loses the check after the deposit, you are responsible for contacting the maker of the check to determine whether the check was indeed cashed or to have the maker put a stop payment order on the check and reissue a new check.

The bank I went to would not cash my payroll check. Can someone call and tell the bank to cash my check?

A bank has the right not to cash your check if you do not have an account relationship with it. However, your employer can make arrangements with the bank to cash payroll checks.

How long is a personal check valid?

Six months. A bank is not obligated to honor the check after the validity date.

What is the maximum amount in my account that is insured?

Up to $250,000 per depositor is insured. Multiple accounts at a single bank are aggregated for insurance purposes. For more information about insurance of bank deposits, contact the Federal Deposit Insurance Corporation at 877-275-3342.

I found an old passbook. Whom do I contact about getting my money back?

Contact the Office of Unclaimed Funds in the State Comptroller's office at the Alfred E. Smith Office Building, Albany, New York 12236. The Office can be reached at 1-800-221-9311 from within New York State, or at (518) 270-2200

from outside New York State. All abandoned property from financial institutions is delivered to the State Comptroller's Office after remaining unclaimed for a period of time but may be reclaimed at a later time. The period differs according to the type of property.

Check Cashers

I went to a local check casher who would not cash my check saying that it was more than one week old. Can they do that?

My accounts have become delinquent due to some unfortunate circumstances, and creditors are harassing me by calling at all hours of day and night. What are my rights?

The federal Fair Debt Collection Practices Act has prescribed certain criteria to be followed by collectors. The New York General Business Law, Sections 600, 601 and 602, also set forth prohibited practices and penalties. The hours from 8:00 A.M. to 9:00 P.M. are considered permissible for collectors to call.

My bank is foreclosing on my house because I'm several months late in making payments, and the bank won't accept partial payments. What can I do?

If you are seriously behind in your payments on your home, car, or other personal property, you may be in jeopardy and should contact an attorney, financial advisor, budget planner or a consumer help group for assistance in trying to work out a repayment program with your institution.

What is the maximum interest rate I can be charged by the bank issuing my credit card?

Generally, the rate that may be charged is the rate permitted in the Bank's home state. This is determined by either the State Banking Department which has chartered the bank or it is specified in that state's statutory code. A New York State-chartered bank may charge whatever interest rate the bank and the customer agree to; as a practical matter, however, the maximum rate is 25%, the criminal usury rate.

Are credit card solicitations received in the mail legitimate?

It is not unlawful for a bank or credit card company to solicit you to apply for a credit card through the mail. If you are being asked to pay an upfront fee for the privilege of receiving a credit card or you are not familiar with the reputation of the company soliciting your business, you should call the state bank regulator of the entity's headquarters state (if it is a state-chartered bank) or the Office of the Comptroller of the Currency (in the case of all national banks) to determine the legitimacy of the entity. Your local Better Business Bureau may also be helpful.

Additionally, Section 520 of the New York General Business Law requires that all application forms or pre-approved written solicitations to enter into a credit card agreement for personal, household or family purposes must contain certain disclosures (e.g. APR., annual fee, grace period for purchases) in a box form. A similar requirement is found in Regulation Z.

What can I do if I believe I have been discriminated against by a lender?

Section 296-a of the Executive Law provides that it shall be an unlawful discriminatory practice for any creditor to discriminate in the granting of credit on the basis of race, creed, color, national origin, age, sex, marital status or disability. Any person claiming to be aggrieved by an unlawful discriminatory practice engaged in by a creditor may file a complaint with the New York Superintendent of Banks or the New York State Division of Human Rights. Procedures for filing complaints are contained in Sections 296-a and 297 of the Executive Law.

Most mortgage notes have a provision for the sale of the loan. The loans are sold to investors which in turn provides the liquidity necessary for funding additional mortgages.

Is it legal to charge a prepayment penalty?

There are certain provisions in New York law and regulations that limit the ability of a lender to impose a prepayment penalty on loans with an interest rate that exceeds six percent per annum and which are secured primarily by a one-to-six family owner-occupied residence or certificates of stock or other evidence of ownership in a corporation or other entity formed for the purpose of cooperative ownership of real estate. Specifically, a lender may not impose a prepayment penalty on such loans on or after one year from the date the loan was made and, in the case of loans that are not fixed-rate, the interest rate must remain fixed for a period of at least five years for a prepayment penalty to be legally permissible. In all cases, the mortgage note must expressly provide for a prepayment penalty.

Reverse mortgage, what is it and where can I get one?

Reverse mortgages allow certain senior citizens to access some of the equity in their homes. A portion of the equity can be paid to the owner in either a lump sum or as a stream of payments used to supplement other income such as Social Security. No repayment is made until the borrower no longer resides in the residence.

I paid for an appraisal. Why won’t the bank give it to me?

Real Property Law Section 254C provides that as a borrower you are entitled to receive a copy of the appraisal you paid for. The bank retains the original in their records.

What is the right of recission and when does it apply?

It is an option given to borrowers to cancel a loan contract secured by real estate within three days of closing. The institution or its designee must be notified in writing of your intention to cancel.

The bank refuses to take payments on my mortgage. Can they do that and why?

Lenders can refuse to accept payments on a mortgage if payments on the loan are more than thirty days late. The institution will usually request a single payment to bring the loan current or set up a formal plan to cure the default.

How do I get a satisfaction on a mortgage I paid off?

A certificate of mortgage discharge must be provided by the mortgagor or its designee within thirty days of payoff. NYS Real Property Law 275.

How much escrow can a bank keep?

Under guidelines established in 1997 by the Department of Housing and Urban Development, lenders and servicers can require monthly escrow contributions equal to one twelfth of the total property tax, insurance premiums and other charges agreed upon. In addition, the institution may escrow an additional one sixth of the total as a cushion against unexpected increases in the charges

I don’t understand simple interest loans. Can you explain them?

Simple interest computation is a method widely used in the mortgage industry for calculating interest charges. Interest is calculated on the actual principal used by the borrower without compounding. Payments are applied to interest first and then to principal.

When I apply for a mortgage, what documents should I receive from the banker?

Bankers and mortgage lenders are required to provide documents to applicants within three days. They are required to give the potential borrower a good faith estimate of settlement charges, a disclosure showing whether the lender is planning to service the mortgage or transfer it to another entity, and an information booklet explaining various real estate settlement services

At closing there are so many documents. How do I know what all the charges were and where my money went?

A document called a HUD-1 shows the actual charges imposed on borrowers and sellers in connection with the mortgage. A borrower is allowed to review the HUD-1 one day before the actual closing. The final HUD-1 is to be delivered as soon as practicable after closing.

Why is the rate I see advertised different from the rate I received ?

The rates you see advertised are for individuals with spotless credit Histories and loans with specific characteristics. This rate is also usually for loans closing that day. Therefore, not all mortgages qualify for this rate.

I plan to loan someone money. What is the allowable interest rate I can charge in New York State?

As a general rule, for loans up to $250,000, the maximum allowable interest rate is 16%. In general, permissible rates increase for loans greater than that amount, as set forth in Title 5 of the New York State General Obligations Law. Other exceptions, permitting rates in excess of 16% per annum, apply to loans made by regulated lenders.

Where can I find information about property ("unclaimed funds") escheated to the State of New York?

Escheatment is the process of turning over unclaimed or abandoned property to a state authority, such as if a person dies without a will or a bank account is inactive for 3 years. Property may consist of, but is not limited to Savings and Checking Accounts, Uncashed Checks, Deposits, Wages, etc.

Information about property escheated to the State of New York may be obtained from the Office of the State Comptroller or by calling (800) 221-9311, or by writing the Office of the State Comptroller at 110 State Street, Albany, New York 12236.